Average top ISA rates are up by 0.20% compared to this time last year, even though the base rate hasn’t changed, so it makes sense to take advantage of some of the great deals currently on offer.

This tax year you can invest a maximum of £5,640 into a cash ISA. Here, we look at some of the best accounts and why it pays to use your allowance as soon as possible…

Save early

Thousands of us wait until the end of the tax year to make the most of our ISA allowance, but by doing this we are missing out on a year’s worth of tax-free returns.

Often the reason people leave it late is because providers tend to offer some of their best deals in the run up to the end of the tax year, but there are also plenty of impressive accounts available at the start of the new tax year.

For example, recent days have seen the launch of the Starter ISA Issue 2 from Nottingham Building Society offering a market leading rate of 5.00% – 10 times higher than the current 0.5% Bank of England base rate.

This regular savings account, which is only available in Nottingham Building Society branches, can be opened with a minimum investment of £10, and savers must then pay in between £1 and £470 a month. You can vary the amount you save each month, or miss a payment if you need to.

Kevin Mountford, head of banking at MoneySupermarket said: “By thinking about your ISA allowance at the beginning of the year rather than at the end, you can make the most of protecting your savings from the taxman and help boost your savings pot.

"Many people will have focused on sorting this year’s allowance rather than transferring their existing pot, so consumers should make it a priority to action this sooner rather than later.”

Other new ISA launches

Several other providers have also introduced new competitive cash ISAs for the new tax year. Principality Building Society’s Fixed Regular Saver ISA Issue 3, for example, pays 4.00% tax-free interest.

The account can be opened with a minimum deposit it £20 and you can then pay in up to £470 a month. No withdrawals are permitted during the one-year term of the account.

Similarly, Saffron Building Society has launched a new 12-Month Fixed Rate Regular Saver Cash ISA, paying 4.00% annual tax-free interest.

The account is available by post or through one of Saffron’s branches until April 30. Savers will require a minimum deposit of £10 and a maximum opening deposit of £470, and can save up to £470 per month.

Top fixed rate ISAs

Savers who can afford to tie up their money for a couple of years or more can earn among the highest rates of tax-free interest.

BM Savings' two-year Fixed Rate ISA, for example, pays a generous 4.05% annual interest tax-free on a minimum investment of £500, while Cheshire Building Society’s two-year Direct Fixed Rate ISA pays 4.00% tax-free interest on a minimum investment of £1,000.

For those who are prepared to lock up their money for three years, Halifax’s ISA Saver Fixed account pays 4.25% on a minimum investment of £500, while Marks & Spencer’s Fixed Rate Savings Option Cash ISA 12 pays 3.75% again on a minimum investment of £500.

Halifax also pays the top rate on its five-year ISA Saver Fixed account, at 4.50%. Remember, however, that if you are planning on tying up your money for this length of time, while rates may seem competitive now, they might not seem quite as attractive in two or three years’ time if interest rates are rising.

Best easy access ISAs

The easy access ISA market has also seen some new launches to mark the start of the new tax year.  Nationwide Building Society, for example, has launched the Flexclusive ISA with an impressive rate of 4.25% tax-free.

This is only available to new or existing FlexAccount customers and the rate includes a 2.25% bonus which is payable until the end of October next year.

If you don’t have a FlexAccount, then Cheshire Building Society is paying 3.50% on a minimum investment of £1,000 held in its Direct Cash ISA Issue 2. Again this rate includes a bonus of 2.50% which is payable until the end of October next year. This account does not accept transfers from existing ISAs.

Savers who want to move money across from other ISAs may want to consider Santander’s Direct ISA Issue 9, which can be opened with a minimum investment of £2,500 and does accept transfers. The account pays 3.30% annual interest tax-free, and this rate includes a bonus of 2.80% which is payable for the first 12 months.

If you are considering an account which includes a bonus in the rate, always remember to move your money once the bonus disappears.

Mr Mountford said: “It’s important for savers who take out an easy access account with a short term bonus to note when the bonus finishes and act to switch. Otherwise, they may well end up on a rate much lower than the leading offers in the market, causing them to miss out on much needed additional interest.”

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.